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Dick Davis Column: Looking for Washington on the "Best States" lists |
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Written On: July/August 2006 |
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Written By: By Richard S. Davis - President, Washington Research Council |
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Most people keep score. Whether it’s benchmarking, performance measurement, best practices or quality assurance, the process comes down to keeping score—measuring yourself against the competition.
Even T-ball players, whose coach tells them that there’ll be no score keeping, keep score among themselves. Not always accurately. I remember games when the first question the kids asked was, "Who won?"
Of all the reports we put out under the WashACE banner, the most popular, hands-down, is the annual Competitiveness Redbook, ranking the 50 states on a host of measures from tax burdens to home ownership rates. Collectively, the information tells us something important about how our state fares against the competition.
Over the last 12 months, several magazines have published business climate rankings, including Site Selection, Forbes, Inc., and Chief Executive. By their lights, this state has a ways to go. Most of the top states emphasize low costs and high-quality services. And while incentives matter, they matter at the margins.
Here’s North Carolina Gov. Michael Easley, winner of Site Selection magazine’s top billing: "Our interest has been the simple strategy of improving education and reducing the cost of doing business. We’re starting to lower the tax burden on business, and we’re watching closely our workers’ comp program."
Following North Carolina in the top 5 were Texas, Georgia, Ohio and Tennessee. Washington didn’t make the top 25.
Chief Executive ranked the top 5 in its best-and-worst survey this way: Texas, Nevada, North Carolina, Florida and Georgia. Washington received a "good" ranking, placing it in the second tier. Editor Bill Holstein commented: " ... politically 'blue' states, where governments tend to over-regulate, are clearly going to lose more jobs as CEOs shift economic activities elsewhere."
Site Selection’s editor, comparing the rankings, noted both the similarity in overall rankings and a slight distinction. Where Chief Executive put a high premium on labor and political issues, emphasizing workforce quality and labor costs followed by taxation and regulation, Site Selection also considered things like access to distribution channels and energy costs. Chief Executive’s rankings were determined by survey responses; Site Selection blended survey results with data on business-expansion activity.
Inc. and Forbes looked at metropolitan regions rather than states and reached remarkably similar conclusions.
In what Inc. calls "the revenge of the boondocks," the economic action has moved from major urban areas to "the periphery." Inc. relied on measures of employment growth to establish its rankings. In a rare nod to Washington, Bellingham shows up as the sixth-best city for business. Florida dominates the list, with 19 cities in the top 100; Washington has seven. The Sun Belt fares well, with Las Vegas topping the list of large cities, followed by three Florida communities.
Forbes also looked broadly at objective data, including job and income growth, business costs, living expenses and education levels. Different measures—similar results. Albuquerque, N.M. topped the list, followed by Raleigh, N.C.; Houston, Texas; Boise, Idaho; Knoxville, Tenn.; Phoenix, Ariz.; and Nashville Tenn.
Washington, which showed well during the tech heyday, has faded in the stretch. High business costs drag the state down in the Forbes rankings, with Seattle, ranking 101st, showing business costs 45 percent higher than the average. Among larger cities, Bremerton posted the state’s highest ranking, 56th, followed by Tacoma at 80th; Seattle, 101st; Spokane, 114th; and Yakima, 198th. We did a little better among smaller cities, with Olympia ranking 29th; Kennewick, 34th; and Bellingham, 64th.
It’s easy to discount these rankings as public relations tools, touted by the winners and tossed by the losers. Yet, a clear trend emerges. The people who make and influence where businesses expand and locate are looking to dynamic, business-friendly, low-cost states. States that offer collaborative models for regulatory compliance, a skilled labor force, affordable land, efficient transportation systems, and tax structures that do not weigh heavily against employers are winning the competition.
Gov. Christine Gregoire embraces global competition, saying that we "need to think of ourselves more like a small nation, not a state." Our favorable international access and successful ports are important. Yet, our sustained economic vitality will also depend on improving the state’s competitive position regionally and nationally.
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